IMF raises global growth forecast to 3.3% in 2026 as AI investment surges

A key reason for this resilience is the surge in technology and AI-related investments. Spending on information technology, especially in the United States, is at its highest level in more than 20 years, according to the IMF.

This surge is impacting global markets, boosting business activity and supporting Asia’s technology export sector. Global stock markets have also risen significantly since the widespread adoption of generative AI tools, making it easier for companies to access capital and facilitating further expansion.

Easy financial conditions and rising corporate profits are helping to sustain global expansion. However, the IMF warns that this trend is increasingly being financed by debt, increasing the risk that companies will suffer if financial conditions tighten or AI returns fall short of expectations.

Rising leverage, frequent hardware upgrades, and changing profitability assumptions can all put pressure on companies and have ripple effects across global financial markets.

The IMF compares the current AI investment cycle to the dot-com era of the late 1990s. Investment levels are currently similar, but the pace of growth is more moderate, supported by improving earnings, suggesting a low risk of overvaluation in the near term.

Still, the report warns that global growth could still be vulnerable if there is a sharp correction in AI stocks. Technology companies now play a larger role in global indexes, and significant price changes in the market can impact consumer spending and confidence around the world.

On the positive side, AI is starting to deliver measurable productivity gains, which could add around 0.3% to global economic growth this year. On the downside, if investor confidence weakens and technology spending slows, global growth could fall by 0.4% from baseline estimates, especially in technology-dependent economies such as the US and Asia.

The IMF has highlighted rising geopolitical tensions, trade restrictions, and strained fiscal balances as key risks that could increase global economic volatility.

The Fund calls on policymakers to rebuild fiscal buffers, maintain price and financial stability, and reduce uncertainty. Central banks are advised to remain focused on controlling inflation, being prepared to adjust policy if market conditions change.

The IMF also emphasizes the need to support workers affected by automation and AI. Governments are encouraged to invest in skills development, promote job mobility and ensure that the economic benefits of new technologies are widely shared.

The IMF says global economic growth is holding up better than expected despite trade disruptions, but warns that the concentration of investment in technology could create new vulnerabilities over time.

AI is giving a powerful boost to the global market today. Policymakers and investors now face the challenge of translating that momentum into stable, long-term economic growth while guarding against financial and structural risks.